Vail Resorts Inc. Unsecured Notes Rating Lowered To 'BB-' From 'BB'; Recovery Rating Revised To '5' From '3'

SAN FRANCISCO (S&P Global Ratings) Feb. 6, 2025--S&P Global Ratings today lowered its rating on Vail Resorts Inc.'s senior unsecured notes to 'BB-' from 'BB' and revised the recovery rating on this debt to '5' from '3' to reflect increased secured debt in our waterfall, which reduces collateral available to unsecured lenders in a recovery scenario. Our '5' recovery rating indicates our expectation for modest (10%-30%; rounded estimate: 10%) recovery under a hypothetical default scenario. On Jan. 27, 2025, Vail amended the credit agreement governing its term loan and revolving credit facility due 2029 to provide $450 million of delayed draw term loans (DDTL) and increase revolver capacity to $600 million from $500 million. While the DDTL remains undrawn, we

...- Our '##-' issue-level rating and '5' recovery rating on Vail Resorts' $600 million senior unsecured notes due 2032 indicate our expectation for modest (10%-30%; rounded estimate: 10%) recovery in the event of a payment default. - We assume Whistler Blackcomb and Andermatt-Sedrun will be treated as unrestricted nonguarantor subsidiaries with a 65% stock pledge to Vail Resorts Inc. and that Peak Resorts will be treated as a nonguarantor subsidiary with a 100% stock pledge to Vail Resorts Inc. - Vail Resorts' unsecured lenders benefit from modest unpledged residual equity value (35%) from Whistler Blackcomb and Andermatt-Sedrun because our estimated distressed value of the subsidiary assets exceed subsidiary debt claims. There is no residual value generated from Peak Resorts assets given significant amounts of outstanding debt at the subsidiary. - We assume in our recovery analysis Vail draws down all $450 million of new delayed draw term loans to repay its $525 million outstanding convertible...

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